Embattled economic minister Akira Amari on Thursday resigned over a graft scandal involving the misappropriation of funds within his office, dealing a hard blow to Prime Minister Shinzo Abe’s Cabinet.

The resignation of Amari — a key engineer of Abenomics and mastermind of Japan’s successful bid last year to reach a landmark 12-nation Trans-Pacific Partnership free trade agreement — will considerably delay the expected ratification of the deal by the Diet.

Later in the day, Abe named former environment minister Nobuteru Ishihara as Amari’s successor. The quick replacement was formalized in the evening through an attestation ceremony at the Imperial Palace.

Amari was the only Cabinet member with full background knowledge of the secretive multinational negotiations that went into the trade pact.

During a news conference at the Cabinet Office, Amari acknowledged that he had accepted ¥1 million in cash from a worker at a Chiba-based construction firm, but maintained that the funds were properly reported in his political funds control report. Amari again denied having acted illegally.

He did, however, admit that one of his secretaries received ¥5 million from the construction company, ¥3 million of which was not declared in his political funds report. The cash was used privately by the secretary, Amari said.

He also admitted two of his secretaries enjoyed being wined and dined at the expense of the construction company worker.

Amari said he would resign to take responsibility for improper management of his office staff.

He further maintained that, were he to stay in the post, it would only hinder deliberations on the fiscal 2016 budget in the Diet.

“Today I decided to resign as a Cabinet member,” he said, with tears filling his eyes.

Amari, a 66-year-old Lower House member elected from Kanagawa Prefecture, was one of Abe’s closest allies and a key brain in the prime minister’s economic policies.

Amari served as the head of Abe’s campaign office for the 2012 presidential election of the ruling Liberal Democratic Party, which eventually put Abe back into the prime ministership later that year.

Amari once offered his resignation to Abe in 2013 when he was diagnosed with a cancer on his tongue. Abe begged him to stay, and Amari returned to his duties after fully recovering following an operation.

Abe first tapped Amari as trade and economic minister when he won his first prime ministership in 2006.

Amari’s decision to step down put an abrupt end to the weeklong graft saga that has rocked the Abe administration since it first surfaced.

Last week’s issue of the weekly tabloid Shukan Bunshun ran an article alleging that Amari received envelopes containing ¥500,000 from the construction worker, identified as Takeshi Isshiki, on two occasions — first in November 2013 and then in February 2014.

Isshiki allegedly asked Amari’s secretaries to help tilt the settlement of a dispute between his firm and public housing corporation Urban Renaissance Agency (UR) in his firm’s favor. The dispute was over a local redevelopment project.

The magazine claimed Amari then hid the envelopes in a suit pocket on both occasions. But on Thursday, Amari stressed he had no recollection of such behavior, saying, “I would never do anything like that.”

Amari acknowledged receipt of the envelopes, along with boxes of confectioneries, but said he told his subordinates to properly declare the money as donations.

Until Thursday, Amari had consistently declined to explain himself and was adamant that he needed to scrutinize the facts before addressing the allegations.

Thursday’s explanation about his secretaries is based on the result of an investigation conducted by an independent third-party lawyer, he said.

The scandal came to light on Jan. 21, when Shukan Bunshun ran the article based on a tell-all account by Isshiki alleging Amari and two of his secretaries received from him cash and dining expenses to the tune of at least ¥12 million over the past three years.

On Thursday, the magazine published a follow-up article quoting Isshiki as asserting that the financial sacrifices he made for them would total “tens of millions of yen.”

The secretaries later began simply exploiting Isshiki’s wealth, such as by dining and drinking at pubs and kyabakura (cabaret bars) at his expense, while making no real effort to facilitate the negotiation with UR, according to the magazine.

Earlier Thursday, a Democratic Party of Japan-led task force established to examine Amari’s allegations summoned representatives from UR and its supervisor, the land ministry, to grill them over the claim by Shukan Bunshun that the Amari side had contacted their organizations over the redevelopment project.

The representatives, however, doggedly refused to answer, saying they were still in the middle of confirming facts.